Understanding the Greek Labour Market: Taxes, Payrolls, and Employment Law

Greece has one of the most complex labour markets in the European Union, shaped by decades of economic reform, a significant informal sector, and a robust social insurance framework. For multinational companies expanding into Greece or HR professionals managing Greek employees, understanding the local payroll system, tax obligations, and employment regulations is essential. TalentUp data shows that gross salaries in Greece remain among the lowest in Western Europe, making accurate benchmarking and total compensation planning critical for attracting and retaining talent in this competitive market. This guide covers the Greek tax system, social contributions, payroll conventions, employment law, and practical considerations for compensation professionals.

The Greek Personal Income Tax System

Greece operates a progressive personal income tax system. The tax brackets for 2026 are: 9% on annual income up to EUR 10,000; 22% on income between EUR 10,001 and EUR 20,000; 28% on income between EUR 20,001 and EUR 30,000; 36% on income between EUR 30,001 and EUR 40,000; and 44% on income above EUR 40,000. These rates apply to employment income after deductions for social insurance contributions made by the employee.

A key feature of the Greek tax system is the personal tax credit, which effectively reduces the tax liability for lower and middle earners. The credit stands at EUR 900 for single taxpayers without dependants, and is reduced proportionally for those earning above EUR 12,000. Taxpayers with children receive additional credits, making family status a relevant variable in net salary calculations. Tax returns must be filed electronically through the AADE (Independent Authority for Public Revenue) portal, typically between March and July each year. Employers are required to provide employees with an annual earnings statement to support their tax filing.

Greece also historically imposed a solidarity contribution, a surcharge that applied to higher earners. While suspended during the COVID-19 pandemic, it has since been reimplemented in modified form for specific income categories. Employers must factor this into gross-to-net salary calculations, particularly for senior or executive roles. Advance tax payments may also apply to certain income categories, adding complexity to year-end payroll reconciliation. Companies entering Greece should work with local tax advisors to model the full effective tax rate across different salary bands before setting compensation ranges.

Social Insurance Contributions Through EFKA

Social insurance in Greece is managed by EFKA (Unified Social Security Fund), which consolidated multiple legacy insurance funds into a single body. Both employees and employers contribute to EFKA based on gross salary. Employee contributions total approximately 13.87% of gross salary, covering main pension (6.67%), auxiliary pension (3.25%), healthcare (2.15%), and other minor funds. Employer contributions add approximately 22.29% on top of gross wages, covering main pension (13.33%), auxiliary pension (3.25%), healthcare (4.55%), and additional social funds.

Combined, total employer and employee social contributions amount to over 36% of gross salary, making total employment cost substantially higher than the gross wage alone. Contributions are subject to a monthly ceiling based on multiples of the national average wage. EFKA contributions entitle employees to healthcare through EOPYY (National Organisation for Healthcare Services Provision), which covers hospital treatment, specialist consultations, medication, and other medical services. This healthcare coverage represents significant non-cash value that should be clearly communicated in total compensation packages, particularly when comparing Greek offers against other European markets where employees may need to purchase private health insurance.

The 14-Month Salary Convention: Greece’s Unique Payroll Feature

One of the most distinctive features of Greek payroll is the 14-month salary convention. By law or collective agreement, Greek employees are entitled to receive two mandatory bonuses in addition to their 12 monthly salaries: a Christmas bonus equivalent to one full monthly salary, and Easter and summer leave bonuses each equivalent to half a monthly salary. These are not discretionary payments — they are legal entitlements under Law 1082/1980 and subsequent collective agreements.

The Christmas bonus must be paid by December 21, the Easter bonus by April 30, and the summer leave bonus by July 15. These payments must also have social insurance contributions deducted, and employers must account for these additional payroll costs when budgeting annual compensation. For HR teams benchmarking Greek salaries against other European markets, it is essential to use annual total compensation figures rather than monthly figures to avoid miscomparison. According to TalentUp Salary Platform data, many salary surveys in Greece report monthly base pay, which must be multiplied by 14 to reach the true annual guaranteed cost. Failing to account for this when building compensation bands leads to systematic undercosting of Greek headcount.

National Minimum Wage and Sectoral Agreements

Greece’s national minimum wage (NMW) applies to all private sector employees. As of 2026, the NMW is EUR 880 per month for full-time employees based on 40-hour working weeks. This represents a significant increase from the pre-2019 freeze, reflecting the government’s commitment to raising living standards after the austerity years. The historical youth sub-minimum rate for workers under 25 was abolished, meaning all workers regardless of age receive the same minimum wage.

The NMW is reviewed annually by the government in consultation with social partners. Collective agreements in certain sectors, such as construction, banking, and hospitality, may set rates above the NMW. Employers in these sectors must follow the applicable sectoral collective agreement (Klados) rather than just the national minimum. Failure to apply the correct sectoral rate is a common compliance risk for multinational employers unfamiliar with the Greek collective bargaining framework. HR teams should audit applicable agreements when establishing Greek operations.

Employment Contracts, Working Hours, and Leave Entitlements

Greek employment law recognises two main types of contracts: indefinite-term contracts, which are the default form and assumed unless otherwise stated, and fixed-term contracts. Fixed-term contracts cannot be used without objective justification and are subject to maximum duration limits under Presidential Decree 81/2003. Repeated renewal of fixed-term contracts without justification leads to automatic conversion to indefinite-term status, creating ongoing employment obligations for the employer. Part-time and on-call contracts are also regulated and require formal registration with ERGANI.

Standard working hours in Greece are 40 hours per week. Overtime is permitted but tightly regulated: the first 8 hours of weekly overtime attract a 40% premium, and subsequent overtime hours carry a 60% premium. Work on Sundays and public holidays attracts additional premiums. Greece has 12 public holidays per year. Employees are entitled to paid annual leave starting at 20 working days for employees who have completed their first year of service, increasing to 25 days after 10 years of service. Leave must generally be taken within the same calendar year and cannot be replaced by payment in lieu except upon termination.

Termination, Severance Pay, and Collective Dismissals

Terminating an employment contract in Greece requires adherence to strict notice period rules and severance pay obligations. Severance pay is calculated based on length of service: employees are entitled to compensation ranging from 1 month’s salary (for less than 1 year of service) up to 24 months’ salary (for service exceeding 28 years). This severance is reduced by 50% if the employer provides the legally required notice period, which ranges from 1 month for employees with 1 year of service up to 24 months for those with over 28 years.

Collective dismissals are subject to additional restrictions. Employers with more than 150 employees must notify OAED (Manpower Employment Organisation) and cannot exceed a set percentage of workforce reductions per month without government approval. These protections make workforce restructuring in Greece a complex and time-consuming process. Failure to comply with collective dismissal procedures can result in the dismissals being declared void, requiring reinstatement or additional compensation. Expert legal advice is essential before initiating any collective redundancy process.

Talent Market Dynamics and Compensation Benchmarking

Greece has experienced significant brain drain since the 2008 financial crisis, with many skilled professionals emigrating to Germany, the UK, and other EU countries. This has created talent shortages in technology, healthcare, and engineering. The Greek government has introduced incentives to attract return migrants and foreign talent, including a special tax regime for new tax residents that caps personal income tax obligations for seven years under certain conditions, creating opportunities for employers to offer attractive net packages.

Using the TalentUp Salary Platform, companies can benchmark Greek compensation against regional peers in Southern Europe and across the EU. Greek professionals in tech and finance increasingly expect salaries closer to EU averages, particularly as remote working has enabled them to compare offers from international employers. For strategic compensation planning in Greece, our guide on auditing salary bands provides a practical framework for aligning pay ranges with market data. Companies managing teams across multiple European markets should also consult our resource on managing compensation for a global workforce.

Payroll Compliance and ERGANI Reporting

Greek payroll compliance involves several recurring obligations that differ from other European countries. Employers must submit monthly payroll declarations (APD) to EFKA detailing contributions per employee. Annual income statements must be filed with AADE. The ERGANI information system requires employers to submit pre-hiring notifications before any employee starts work, and changes to working hours, overtime, and employment status must be declared through ERGANI on the same day they occur.

Payroll software must comply with Greek AADE and EFKA standards, and most multinational companies use either local payroll bureaus or global payroll platforms certified for Greek compliance. VAT, payroll taxes, and social insurance contributions all have distinct payment deadlines, and late payment attracts penalties and interest. The combination of the 14-month salary convention, complex social contribution calculations, and real-time ERGANI reporting requirements makes Greece one of the more administratively intensive payroll environments in the EU. Investing in compliant local payroll infrastructure from the outset saves significant time and avoids costly remediation later.

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